JFE Steel Advances Steel Sheet Price Hikes

JFE Steel, the Japanese major blast furnace steel manufacturer, will advance the hikes of selling prices since the steel sheet markets in Japan and overseas are on the rise. JFE will raise the prices for the export by US$50-100 per tonne in April-June, and it will do for specific users from the contract in April and perform the price maintenance for domestic distributors. The firm reduced the export sales by about 500,000 tonnes both in July-September and October-December over the same period last year because the inventory volume of the steel sheets in the Asian market increased. Tsutomu Yajima, senior-vice-president said that the export of the general steel sheets including some re-roller in Asia became nearly zero since the firm took precedence the selling price though there was some offer from Asian consumers in those periods. The firm reduced the production for domestic use by about 400,000 tonnes in the second half of fiscal 2005 since the steel sheet stock increased. Currently, the inventory adjustment in the Asian market is promoted. Chinese steel makers started the hikes because their benefit became in the hole. Consequently, it seems that the all-purpose steel product market prices in China bottom out.The overseas users of JFE Steel advanced the inventory adjustment and placed back the appropriate level. Yajima said the order form the overseas users are increasing after the second half of February. In Japan and overseas, the high-grade steel product demand for automobiles, electric machinery and energy continues the increasing trends. The supply and demand of the high-grade steel products is still tight.As for the domestic market condition, stock of the 3 types of steel sheets, which is hot rolled, cold rolled and the surface-treated steel sheets, increased to 4.44 million tonnes for the first time in 5 months. Yajima prospected that the inventory volume would drop to around 4 million tones of the appropriate level in the end of March and the steel demand in fiscal 2006 would continue its good condition mainly to the manufacturing industry.The firm plans to keep the selling price for domestic distributors and to improve the price for specific users which are purchasing low price compared with other users. The firm is considering the price hike for the specific users because the price negotiation of the iron ore doesn’t come to a conclusion.